Introduction

domestic capital budgeting project: consideration of additional factors 9 Characteristics of multinational companies (MNCs) affecting the cost of capital 10 Ram plc and Pram plc 11 Usefulness of the theory of Comparative Advantage: Motive for international trade 11 Reference 13 1. Financial and non-financial factors influencing establishment of overseas subsidiaries IBF Supplies Plc is a supplier of office items to its clients and is one of the leading companies in the UK market. By supplying the office items at competitive price and also delivering the office items at comparatively less time, IBF Supplies Plc holds a competitive edge over its competitors. The Director has envisaged expansion of the company into foreign markets as the management of the company as the management have assessed a decrease in demand in the domestic markets in future. It was found by IBF Supplies Plc that the markets of Eastern Europe, Asia and Africa showed an increase in demand of its products. Thus in order to offset the decreasing future business in the domestic markets, expanding operations into the foreign markets of Eastern Europe, Asia and Africa through establishing foreign subsidiaries of IBF Supplies Plc in the markets of Eastern Europe, Asia and Africa require assessment of feasibility of the proposal of foreign investment. ...

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